Circular Economy Podcast, Series 02, Episode 2

Dsposal podcast with tech for good live and the circular economy graphic for series 2 episode 2

In this second episode in Season Two, we talk to people who make beautiful cars and the people who recycle the metal in the cars. And Tom's mind is blown, multiple times.

Bex-Rae Evans - Founder at We Are Reply

Tom Passmore - CEO and Co-Founder at Dsposal

Ken Webster - University of Exeter

Marc Zornes - Founder at Winnow

Iain Gulland - Chief Executive at Zero Waste Scotland

James Close - Head of the low-carbon Circular Economy at LWARB

Gaëlle Guillaume - Senior Engineer at Jaguar Land Rover

Andy Doran - Senior Manager, Sustainability & Recycling Development at Novelis Europe

Listen to Series 2 Episode 1.

Listen to Series 1 Episode 1.

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Note:  Tech for Good Live and the Circular Economy has been made to be listened to and not read. We strongly encourage you to listen to the podcast, which includes emotion and emphasis that's not on the page. Transcripts are generated using a combination of speech recognition software and human transcribers, and most definitely contain errors. Please check the corresponding episode before quoting in print.

[Guitar Music "He Swear He Would" by George Fell]

Bex Rae-Evans: we’re still on a crash course to the end of the world and season one of our CE podcast didn’t fix it. So here we are with the tech for good live CE podcast season 2. Will we still be recording this when the tidal waves hit. How many seasons in will we be then? 234 or maybe just 10? Who knows? I’m Bex, and Tom Passmore from Dsposal is here. This time we are focussing more on the Economy part which is great, because everyone likes money and that’s what the economy is about, right?

Tom Passmore: erm…

Bex Rae-Evans: welcome back to Tech for Good live, and the Circular Economy podcasts Season 2 this is Episode 2. If you’ve not listened to the first one, you should go back and listen to it, and also to Season 1. It will all make much more sense - hopefully. In the previous episode we looked at the bio-cycle and introduced economics. Now we have a deep dive into aluminium flows.

Episode 2, Episode 1 ended really positively, where are we going this episode?

Tom Passmore: yeah, so we are going to talk about cars and aluminium and the role of cars in the Circular Economy. I have got very excited about transport as a service and automation. Cars seem to be at the forefront of the whole of the Circular Economy. I went to speak to Jaguar Land Rover – as you do! To talk to people about cars.

Gaëlle Guillaume: I am a senior sustainability engineer at Jaguar Land Rover. I work on sustainability aluminium projects that aims to work on aluminium recycling. So Jaguar Land Rover is Britain’s largest auto manufacturer, and they are producing vehicles that are mostly in the luxury and premium segments and you would have heard of our latest launches such as the Range Rover Evoke and also the battery electric vehicle the Jaguar I PACE released a few months ago.

Tom Passmore: Do you know anything about the I-PACE?

Bex Rae-Evans: Absolutely nothing

Tom Passmore: Neither did I. The I-PACE is like Jaguar’s electric car. This is a really exciting time for the car industry as they have to change. They have been pumping out emissions into the atmosphere for close to 100 years, or over 100 years since the Model T came out. It’s been really damaging for the environment, everyone owns cars, their costly, their expensive. But in the Circular Economy, to get people around, you need cars, and they are changing. Very rapidly for an industry of its size. So they have gone from combustion engines to battery powered engines in about 10 years. It’s a massive overhaul and then you are looking at automation and this “Transport as a Service”.

Gaëlle Guillaume: These are exciting times for the automotive industry. There are many challenges for companies like Jaguar Land Rover to, for example, reduce emissions. This means that we have to think about the way we design our cars which is positive, because people like me can start talking about what the Circular Economy can bring into that equation. And at the same time the way people will move in the future will also completely change and that is where automation is going to come into play. That’s where the connected technologies with the vehicle environment also come into play. That’s where electrification comes into play, that’s where sharing also comes into play and all those will drive a question about ok how do those fit into the CE. Are we sure that the way that we design our batteries is the best way that we can in terms of reclaiming what is in there? Do we know the provenance of those materials? So those are also questions that we need to address as a company. For example, in the sharing environment great we have put cars on the road, they will stay there for 4 – 5 years, do we know what we are going to do with those assets when they reach end of life? That’s also a question that we need to answer. As well as for the autonomous capabilities that we are developing for future vehicles. What does that mean in terms of social impact? The future of automotive industry is bright I believe. And there is a lot of opportunity for future sustainability projects and circular projects to thrive in that environment. Even though there are a lot of challenges, that means that there are many more opportunities for us to take and to tackle those challenges as best as we can.

Tom Passmore: The main reason I went down to speak to Gaëlle and Jaguar Land Rover was what she was mentioning there about end of life for vehicles. Jaguar Land Rover are using a lot of aluminium in their cars. Aluminium is a high value material that is infinitely recyclable. You can keep throwing it around the system time and time again, but there is a problem within the waste industry. We don’t handle cars that well. We pull the wheels off them turn them into a giant cube and send them overseas. Not the best way of handling a viable resource like aluminium. Especially when there has been so much design and effort gone into it. Is there a way that they can change that? They are working on this project called the “Reality Project”.

Gaëlle Guillaume: Reality is an Innovate UK funded project where the consortium, Jaguar Land Rover, Novelis (one of our aluminium suppliers), Axion, Norton who has an aluminium smelter, and we also have the support of Innoval giving us their knowledge of the aluminium industry, as well as two academic partners, Brunel University and Warwick Manufacturing Group. We are working together to understand if we can use end of life vehicles or other aluminium scrap sources to make aluminium alloy grades to be used in Jaguar Land Rover vehicles. We are using five series aluminium and six series aluminium so within those grades is there a potential for us to tap into the resources that we have in our scrap yards. End of life vehicles are shredded and then this shredder residue is usually shipped over to other places where it is downgraded to other applications. Potentially there would be an opportunity for us to use it for automotive components and to have an application for that aluminium scrap. To do that, once the scrap has been shredded, we need to understand the different processes needed to refine that scrap so that it is of sufficient purity for us to use back in the production of aluminium alloy grades.

Bex Rae-Evans: I love the idea of a car shredder!

Tom Passmore: You can go on You Tube and look at videos of it! It is like a giant paper shredder!

Tom Passmore: That is how these really valuable assets are being treated at the moment, and this is what the Reality Project is looking into. Is this the only way? Hopefully no!

Tom Passmore: I have always thought that cars went to scrap dealers and were taken apart because of the high value materials in there, but that is wrong. What can we do? And this is why they are doing this.

Bex Rae-Evans: but taking things apart is more difficult than it sounds though isn’t it? I know that mattresses don’t get taken apart because of the amount of time it takes. There is value in the materials but it doesn’t add up to the amount of time it takes to take them apart.

Tom Passmore: Yes, exactly. And it makes sense to hit high value items like aluminium first and try and solve that problem. Gaëlle mentioned another company that Jaguar Land Rover are working with – Novelis. So I went to speak with Novelis as well.

Andy Doran: I work for Novelis. My role for Novelis is sustainability and recycling development. Novelis is a global aluminium flat rolled products company. We make aluminium sheet, highly engineered for multiple applications, including automotive applications, beverage packaging applications and various others. I guess our interest, our driving force in Circular Economy thinking is around being the world’s largest recycler of aluminium. In terms of global footprint, we run a number of closed loop systems for taking material from product to product, our single largest site for aluminium processing is the world’s largest buyer of aluminium.

Tom Passmore: So these are the aluminium people. They are massive, global, and working very closely with Jaguar Land Rover to solve this problem of aluminium just going to waste. It takes a huge amount of energy to get aluminium from the earth. Do you know anything about aluminium?

Bex Rae-Evans: just like you know nothing about cars, I know nothing about aluminium.

Tom Passmore: aluminium comes from an ore, called bauxite. You rip out this ore from the planet, you turn that into alumina, and you smelt that down into aluminium. The key message to take away is that aluminium is always an alloy. To use it in any kind of product it has to be an alloy. It has to have other metals in there like copper. This gives it the properties it needs, either to be nicely malleable, or for strength, or so that it does not oxidise. Even though it is infinitely recyclable, you also have to make sure that it stays segregated with its correct alloys, because as soon as you start mixing them together, that’s when the aluminium becomes junk. One of the things I asked Andy was will we ever get to a point where we won’t have to do any mining of bauxite, and we reach 100% recycling for aluminium.

Andy Doran: the ambition of the business is to continue to grow, and grow the amount of recycled scrap. We have already taken great strides, where in 2011, we were at 33% recycling and we are currently at 61%. The challenge with getting to 100% is still there for some time. We have systems at the moment where we are not recovering 100% of aluminium. If you are going to have a 100% recycled system, you need the collection to be 100% perfect. For example, if you look at average cans in the UK market, we recycle really well, 75%, but that still means that on a system level you are not getting 25% back in, so if you are going to make beverage can sheet, you are going to need 25% non-recycled inputs to fill that gap. That’s one of the issues, the other one is markets are growing and continue to grow, because aluminium’s properties are bringing it into new areas, and expanding existing areas, particularly automotive, where aluminium’s penetration into the automotive market is growing and will continue to grow as I think people are looking at it as a material that can bring “lightweighting” and the benefits of “lightweighting” – things like the electrification where people are now saying to extend battery life, having a lighter chassis, a lighter vehicle helps that battery go further so you are going to see aluminium continue go grow in certain markets and again on a systems level, if your market is growing, you are always going to need to be putting something into it. So 100% is the ultimate goal, but it might keep moving away from us for a while as the market continues to grow.

Tom Passmore: what Andy’s saying is that we will probably never get to 100%, we will probably recycle aluminium streams for lots of different reasons. It’s a great market and it has to be perfect system to get aluminium back into the market. Like Ken was talking about earlier, they have to be “leaky loops”. The idea of “leaky loops:” they will go into different systems – even though they might be perfectly good for different applications they probably won’t be able to use “leaky loops” for beverage cans, aluminium grade so we are always going to have to be extracting bauxite from the ground to be put back into the system.

Bex Rae-Evans: everyone wants aluminium is what I get out of that.

Tom Passmore: everyone wants aluminium because it is a wonder-product.

Bex Rae-Evans: I liked the term “lightweighting”

Tom Passmore: yeah, like “lightweighting” cars so they are more energy efficient for their batteries – and then the batteries are insanely heavy so you just instantly lose all that gain – but, you know, what do I know about cars? One of the questions I asked was like cool, the demand for aluminium is constantly increasing, we haven’t got a perfect recycling system – are we going to run out of bauxite?

Andy Doran: we are not going to run out of aluminium theoretically. It is a fairly abundant material as a primary material. The sustainability challenge with the material is the high carbon embedded cost of conversions. You have got to convert it and that’s where all the energy goes into and that it why it is quite a carbon rich material. So I don’t think we will run out of material, you might ration, or run out of the, energy needed to convert it. So that is where recycling plays its part. And then that’s where people might start looking at the use of that sort of material in short life applications or disposable applications. That’s where the models are going to have to start to change really to get aluminium back into that 100% closed loop system.

Tom Passmore: this is really interesting because it what was we were saying in the first episode - I know we aren’t talking about money yet but its about the idea of you can’t just look at materials in its own thing, in its own bubble. You have to include energy in there, you have to include money in there, you have to include flows. They become very complex.

Bex Rae-Evans: definitely, because at first when Andy said that aluminium wasn’t going to run out you think great! Let’s make everything out of aluminium then. But actually the picture is much more complicated than that.

Tom Passmore: yeah, there are very, very high energy costs to extracting aluminium and to recycling it as well. It was interesting going and talking to Novelis about this because yes, there is this growing demand for aluminium and then it is recyclable but you have to capture it which then brings its own problems, and then energy problems come into it. Again, the wicked problem is starting to emerge which I do think is fascinating. I wanted to understand how the project was going with Jaguar Land Rover and Novelis so I then ask them about their relationship.

Andy Doran: our relationship with Jaguar Land Rover is a very deep one and a very longstanding one. Probably slightly overstating it to say that between the two companies I think they pioneered the use of aluminium in the automotive space. I mean Jaguar Land Rover was the first and still the only company that has gone “all in”. They decided at an early stage that they wanted a full aluminium architecture. So, you know, largely chassis body parts, basically as much as they can they are making out of aluminium. That led them very quickly to look at the sustainability credentials of the material to see if they are going to use that material, could they make it a more sustainable version of aluminium, and that led them very quickly into thinking around using more recycling etc. Novelis has had a longstanding relationship with Jaguar Land Rover which is underpinned by very strong commercial relationships and I think that is one thing everyone glosses over in the Circular Economy – which is you actually need a business and the finances… it needs to be sustainable, you know. That has certainly been the case with working with the companies. We have done a number of different projects and innovations over the years with Jaguar Land Rover that, again, in some ways have led the industry in that area of thinking.

Bex Rae-Evans: so they aren’t the world’s biggest recycler of aluminium just for fun. It is also because it turns a profit.

Tom Passmore: yeah, I think Novelis did very well for themselves. But is profit a dirty word? Like Andy says, sustainable businesses still need to be sustainable. It’s all well and good doing positive things but if you run out of money, you stop being able to do those positive things. I think there is that interplay because again, to have a thriving economy (and it doesn’t have to be growing) you do need to have businesses working within that to be creating wealth, to be creating those cascades of money and flows and thinking. When we go back to speaking with Andy in a second, he does say that everyone baulks when talking about money – and it’s so true. I have tried to talk to literally everyone about money and Andy was the only one that came even close to having a chat about money within a business sense. I think that is really funny, when you are talking about the Circular Economy, you are talking about economies, the economy is about money, yet no one likes to talk about it. It becomes a very dirty word if you are doing something sustainable, or if you are doing something that is environmentally friendly – people mumble reluctantly “we make money”. It’s not a bad thing. It’s what keeps people clothed and in houses and fed. Money isn’t a bad thing, it’s just when it becomes the “be all and end all” of a business – that’s when it becomes an issue. I was talking to Andy as well, around this idea of aluminium and the Reality Project, and how it flows through the two businesses. They are different entities, so how does that work?

Andy Doran: that was part of the strategic thinking from Jaguar Land Rover’s perspective when they started using aluminium – how do we make it more sustainable. Clearly one of things they want to do is minimise their own process waste. They waste quite a high percentage in the automotive industry – usually north of 40% which is quite a high scrappage rate. Now that’s just Jaguar Land Rover, that is industry standard. Jaguar Land Rover’s interest is in trying to reduce that number. It is not a regular shaped pattern that they are making. Think about the complexity with that. What we work with them on was initially called Real Car – an aluminium car – Project No. 1 – how do you put a closed loop system together? And what are the consequences of that? Essentially, coming out of Real Car 1, which was an Innovate UK/ UK Government funded project was this closed loop production system and that has manifested in our system here in Warrington – in very simple terms, we are taking press shop scrap as segregated as we can get it, and that depends on the individual press shop because they are all largely retrofitted with conveyer systems to manage scrap. Some of it is done by campaign, so you will know a particular press shop is using this particular alloy this week, and therefore we can keep that separate and have that as a separate alloy, so the automotive industry uses a number of different alloys. Jaguar Land Rover uses 3 or 4 principle ones in the in the 5 or 6 thousand series of alloys. We through our contractor partners recover that material from the Jaguar press shops and their tier one partners, so pretty much everything that Jaguar produces in the UK, I think it is about 15 sites, is consolidated and brought into the Warrington site here. We re-melt that, cast it into an ingot, again that alloy cleanliness is important, that segregation to keep the efficiency of that as high as possible, and then that ingot is loaded onto a train in Widnes we run a train as Novelis every day out of the UK through the Channel Tunnel into the Rolling Mill Complex and the Finishing Complex to take any ingot, a big slab, and those slabs are about 10 tonnes. We take that down to another sheet of aluminium that is going to go into another pressing line. Jaguar’s workshop requires that after we have cast it, it is then hot and cold rolled so it is pressurised and rolled down to a thin sheet. We’ve got rolling mills in Germany and Switzerland that will do that, and then it needs, depending on its application in the car, or where it is going to be used, it will need a certain amount of “finishing”. So that is solution chemical heat treatment – you are tempering it, you are etching it, you are using different elements to give the aluminium its structural properties. The train leaves the UK, takes it into the first stage, drops in the ingot that it is going into the rolling process, and will pick up work in progress and take that into the next factory where it will finish, and the train is running back through that tunnel every day with finished goods into a distribution warehouse in Daventry and then that is supplied into the various “presh ops” and the circle starts again. That was a pretty good example of how you can make a circular system work, I guess in general terms, there was an alignment between the companies about how do we make this as affordable for the partners. If you think about buying 100% material, using, say 60% and scrapping 40% you can do a certain amount of adjustment of your payment terms. Essentially, Jaguar is not taking 100% of the ownership the whole of the time. In payment terms, it is being financed through a different mechanism. We are not selling 100% and buying back 40%, instead it is being financed through payment terms mechanisms, whereby there is money flowing between the two companies. There is a bit of jiggery pockery in the finances which makes this a more financially sustainable system.

Tom Passmore: it is interesting isn’t it, you start talking about money and people do start feeling uncomfortable because it is complex. You could hear how complex that project was. Getting the aluminium separated in 15 different sites, and getting that all together, and through the Channel Tunnel to get rolled, and then brought back, and the payment terms that go with it – and that is just one material between two businesses. For me this is example became really interesting to understand the complexity around closing loops.

Bex Rae-Evans: is that loop more complicated than if you just get fresh batch of aluminium delivered to your door?

Tom Passmore: yeah. You could just get aluminium from China, in an ingot, delivered. You don’t have to worry about composition, you just have to worry about provenance – where it has come from. It becomes very complex. I was talking to Gaëlle about how it is working from their point of view. One business is all about looking at the waste side of things and flowing it through to get it back to a product. The other one is about making a product and throwing the other bits away – but then they are hoping to bring the waste back through – what happens to that product? And so I had a chat to Gaëlle about it.

Gaëlle Guillaume: it’s really complex because the way that the scrap industry works, at least for cars, is that the cars are shredded and that’s it. You get some fluff out of it, which is where you have all your textile or plastics end up. You have that ferrous fraction which is all your steel scraps, and then you have your non-ferrous fraction. Potentially, if there are different markets for all those different types of scraps to be used, maybe there is a way forward for the metal recycling industry to revive the way they do their processes internally. Maybe they will start to say maybe we don’t end up our processes here, maybe we have to also include a segregation step where we can refine it a bit further so that it can be used for more applications, and that’s why you have a market that is evolving, and you have new applications and new business opportunities for companies who have been just focussing on shredding and exporting material.

Bex Rae-Evans: that’s cool so it really goes back to the circular though and the design of the manufacturing process and how that might change now that they are starting to consider how they are recycling

Tom Passmore: yeah, so there is this constant knock on design effect. We’ve talked to Andy at Novelis. We have to think about how you get material from A to B through the tunnel, rolled out, back through, into the right places so that we can all go round the system again. But then you actually have to design the cars in a way to allow that to happen then you have to design the factories slightly differently. You have to be talking to people like Andy and the other scrap merchants. The complexity keeps building.

Bex Rae-Evans: but it is nice to hear that they have brought in enough to actually make changes to the manufacturing process and the car design. That’s cool for me. It’s not just an add on, it’s not just recycling. It’s going further than that.

Tom Passmore: I think this is what I find so interesting about the automitove sector. They have got gone for it. On every kind of aspect of it. If we are talking about recycling, CE, Electric Cars, you do end up talking about the concept of transport as a service. I was chatting to Gaëlle about transport as a service and JLR’s role in that.

Gaëlle Guillaume: well the automotive industry as a whole is starting to look into a future that is more automated and also electrified and shared. So yes, JLR has been working in that space already. We have already partnered with Waymo to supply them with a few hundred I – PACE for their autonomous shared fleet in the US. We are working in that space, and also when we enter a worled when we have cars that are used in that transport as a service model, we also need to understand that those cars will be used at a higher use than what personal vehicles are at the moment. Potentially, a car that can be used in the share mobility fleet environment will be on the road constantly, which means that potentially its life will also shorten quite significantly. So those cars might have a life cycle of four years, which is a random number in comparison to a personal vehicle which would stay on the road for about 12 to 15 years. So we would have cycles of vehicles that are much shorter. So newer cars will be hitting the scrap yards. WE need to understand what we do with them, if we re-manufacture them, recycle the materials in them, if we repurpose the batteries for another use. There are lots of opportunities around transportation as a model to understand for a service and what that means, and how could get more value out of those assets as well.

Tom Passmore: this blew my mind! I love this idea of transport as a service, and autonomous cars driving around. At no point in that whole talk, has anyone said yeah but if the cars are on the road more, they are going to burn through cars a lot quicker

Bex Rae-Evans: but there will be fewer cars on the road and so it should even out?

Tom Passmore: but what about that bit in the middle, where we have got loads of cars that are ten years old, hitting scrap yards. And then you’ve got cars that have been on the road for 3 years, you are going to get to this point that kicks in, who’s talking about that? It’s not just the tyres, it’s all the little bits that go with it. So we carried on talking about it.

Gaëlle Guillaume: that’s where the big shifts happen for the automotive industry because you have to redesign your vehicles and understand how to loop in the fact that you will have more and more usage for the car. For example you have a door being slammed maybe 20 x more than what it used to be in the past, so we also have to ensure that our standards and our requirements and our tests take that into account. The way we design cars matters.

Tom Passmore: in an autonomous car, it is not just the driver’s car that takes a hammering.

Bex Rae-Evans: are we going to start designing more for wear and tear and less about looks. If people are not buying their own cars, and using them more as a service, do they move to a more utilitarian design?

Tom Passmore: the car wouldn’t be a symbol anymore. Just perfectly designed vehicle to move people around efficiently and effectively. That’s wonderful. I had never ever thought about that. I had always thought it would be all the cars we have now, driving around for 10 years, but no, it will be specially designed cars to be those kinds of vehicles for a shorter amount of time. This goes back to what Ian says – it puts a smile on your face. That’s really interesting!

Bex Rae-Evans: I like hearing about this from Gaëlle. They are thinking about this already. They know their industry is going to change.

Tom Passmore: they know it si going to change, and they are talking with people that they would never have thought of talking with 10/15 years ago. Would a car company talk to a search engine company? Well that’s what they are doing when talking with Waymo.

Gaëlle Guillaume: it has to be an additional source of revenue for JLR for the time being to understand how that develops in the future. That is certainly the reason behind it, because there is a new market segment happening with service companies that want to have that transport service in place, so that is where partnership with companies like Waymo comes into play, because we want to be sure that we are also understanding how that works, and potentially having more of an impact on this in the future.

Tom Passmore: I loved the fact that there is a lot more collaboration going on. I don’t know if that is the case, but that’s how I feel about it. There seems to be a lot more collaboration going on because they are trying to solve problems that they have no expertise in. JLR are trying to solve problems around recycling and aluminium. Thankfully, they weren’t arrogant enough to say we are smart we can figure this out ourselves. They spoke to Novelis about it. They asked how to solve the problem around this new way of using cars. We don’t know anything about data and AI, let’s go and talk to Waymo. That just accelerates this growth, and that’s what’s happening in the automotive industry and that’s what I am finding excidting. But like what we spoke about in the first episode. Is it all good? I asked Gaëlle who the biggest winneers for this.

Gaëlle Guillaume: The biggest winners potentially will be the end consumer, the people that would use that service, because they would be able to access vehicles without having the burden of needing to own those vehicles. Just by hailing an JLR vehicle on the road with the waymo service, people would be able to get from point A – B much easier, without having to think about where to park, and how much that cost them to keep that car in their potential assets. In terms benefits also for the whole value chain, I think that it is quite consistent with what I have said before. A company like JLR will see additional revenue stream from this, and with further control of the materials in our cars, at the end of life, our cars can be used as resources to produce more JLR vehicles either with the repurposing of the battery or even using the aluminium that we can take back, working in partnership with the waste industry. That’s where the value is as well for JLR. And then before that you have all our tier 1 partners, the metal suppliers and the waste industry that can also benefit from being in that loop because that is another type of business that isn’t there currently because the waste industry is currently seen as the end of the loop, but it has the potential to become more of an active stakeholder in that full circular loop if we happen to do that in the future. And I think that is needed.

Tom Passmore: that all sounds perfect. Really, really perfect. You are going to have these car manufacturers that are giving their off-cuts to aluminium smelters to turn back into more sheet to go back into the car to etc. etc. You will have these cars that no one is going to own apart from JLR that you will be able ot access , and once it has come to end of life, it gets taken apart. But again, you have to scratch the surface a little bit. If you have this idea of extended transport fleet around the UK. That will have to be one system. If I wanted to get from Manchester to London, to make that as efficient as possible, they would have to work in Manchester and London, so you wouldn’t be able to have that competition there. You would just have one taxi service – Waymo, and one car company, that controls all these assets. That’s a very powerful position. There would be no competition.

Bex Rae-Evans: if no one owns a car any more, you will constantly be paying out monthly payments to be continuously kept up. I know there are always monthly payments with cars, insurance, tax etc. and petrol, but I know people who have never paid for a car, they have been given them by family members. Really rubbish old car, with costs attached to that, e.g. fixing it – but you have never needed to shell out for a car. I guess especially when you were talking about competition, we are going have to make sure that those monthly payments are affordable for people, and add up to a realistic price that works for everybody and is inclusive.

Tom Passmore: yes, this is “wellbeing” we need to make sure it’s accessible, abundant and regenerative. Make sure that it adds value to everyone that it interacts with. One of the questions I was talking to Gaëlle about was why are we shredding cars? It came down to the fact that taking a car apart was really hard to do well, and not worth it, because it is so cheap to get the raw material that is aluminium. It’s cheaper to get another nation to extract bauxite than it is to take a car apart and give it to someone else.

Ken Webster: I am a bit of a fan of understanding aluminium cycles. You are playing to something I enjoy here Tom. JLR wouldn’t have so much of a problem if they retained control of the vehicles. It goes into third parties’ hands, it goes into customers’ hands. You don’t know where it is, or whether it will come back, and it won’t come back in a controlled way very often. This is another element about product service systems. You can get this material back, and you can design it ot be returned, if you are controlling the use of it much more from creating it to when it ends its first use period. Also, once it gets into third parties hands, it often gets contaminated. Unless it is returned directly to the factory in the way it was, all aluminium is an alloy, and it doesn’t take much to throw that off. You get a mix of downcycled mix of aluminium which is not that useful to the car manufacturers. They would much rather have a very much know alloy, to do all the stress tests and quality tests. They have to have that, and so they would rather pay premium on a new aluminium sheet, than one that is made of recycled material partly because they worry about contamination, and even if there isn’t contamination in it, there is often a question about whether there is enough of the right quality to come back to them. One of the big things about recycling is that we get with aluminium, we keep forgetting that it is all alloy. Even aluminium cans are two different types of alloy, the ones on the tops and the ones on the side are different. You need different qualities of aluminium, and just put it all into one recycling thing, and try to smelt it down, you can only use it for certain products and applications. This was known way back in world war 2. If you hand in your aluminium pots and pans, which were then largely reserved for the middle class and upwards, we’ll make spitfires out of it for the war. But they couldn’t because it wasn’t the right quality to stick in a Merlin engine. Aluminium cans are only really good for aluminium cans. The other element of the bauxite question is that huge amounts of aluminium go into infrastructure, bridges, offices, all sorrts of stuff uses aluminium, and it doesn’t come out of that infrastructure for 70 years. While infrastructure keeps growing, and people keep growing their cities, there is always going to be a demand for new aluminium to come in and it will be locked away for a very long time. At the same time with subsidies for energy, and the huge scale that the smelters work from, they are keen to make sure that the whole production line keeps running, and so they are not going to be very interested in slowing it down, because it ups their costs quite markedly, so they want to keep finding markets for and be very competitive. If the subsidies on the fuel are there, and there is an encouragement for other export subsidies let’s imagie. You can see why good quality new aluminium is so attractive to so many uses. And for things like aircraft, you just cannot use recycled stuff at all, and its so specialist, you can get it back from other airoplanes, but you can’t make your average post consumer waste use for it. Apple have boasted about doing one of their new laptops with recovered aluminium, it is still pre-consumer waste. Top quality shavings that are within the aluminium business. It has never gone to a consumer. It is gathered up and processed, as they always do anyway, but made available in this case for Apple. It is pre-consumer waste, not really a wonder, not really a wonderful thing. The main problems are contamination, reliable supply and the fact that so much aluminium goes into infrastructure, and that all aluminium is an alloy, so you can’t just talk about pure aluminium, something has to be added to give it the quality that customers need. It’s notionally fully recyclable, but to do what?

Bex Rae-Evans: I don’t know what I should have taken from that, but I am thinking we should just cancel aluminium. It sounds like it takes a lot of energy to make, I know we need it for airoplanes, but cancel them as well? No I have got a downer on aluminium!

Tom Passmore: I don’t think it is aluminium that’s the problem. There are just a lot of inbedded processes. The greenwashing that happened during the second World War. Yes, JLR owning that asset to make it easier. If the car goes into consumer’s hands, you don’t know the quality you are going to get back. AT the moment what the scrap dealers are like. You put a JLR and it just gets turned into a mix of stuff. Ken and I continued talking about this:

Ken Webster: it is just the parameters they have got for making full use of that at a reasonable cost. The thing I missed out saying was any recycling takes more people handling than mass production of the raw material does. Mass production is very capital intensive. There is always a lot more labour involved in recovery and recycling. We are back to the tax system. We give subsidies for capital and mass production, and we charge people taxes to be workers. That does not help, you have to admit.

Tom Passmore: when Ken told me this my mind blew again! Why do we tax people to work? Why is labour taxed? Why do I get taxed? It was an interesting comment. I have always paid tax, I actually don’t have a problem with tax, but the thing you are trying to do with work is trying to get money to live and support yourself, and then you bring in automation into any industry, or you are trying to create much more efficient effective systems which doesn’t get taxed. Governments will have less money to spend, and people will have less money to spend. The Government will have to support people more!

Bex Rae-Evans: yes you are losing out on people’s taxes if people are not there anymore, but how do you tax the absence of people?

Tom Passmore: yes, why are these organisations getting incentives to work towards this, so that they get less people in work? Ian in the last episode said that the circular economy will increase the amount of people in work? Is it good for people, is it good for countries? I kept on talking with Ken about these incentives:

Ken Webster: they feel that the impact on energy use by certain parts of the population would be damaging. Yes, the infrastructure has not been invested in to make sure that the houses are properly fitted out to cope with heat or cold, they don’t have the public transport, they don’t have the sophisticated infrastructure. So it is meant to be protecting certain segments of society who would get twitchy if they were paying a lot more for energy. Beyond that it is a whole set of reasons. Large scale agricultrure is built on pumping oil and fertilizers into it. There are lots of production areas that will only work at a large scale and globally because fuel is effectively subsisded. They are not paying the real cost. That is a real threat to many people. If they are trying to run a global soya bean operation, they don’t want costs piling up because their tractros take more energy, the fertilizers cost more to make, and delivering it to the market has gone up. That’s part of it, an expression of power and those people clearly don’t want the rules of the game to change, to make it advantageous to grow things more regionally or locally, or without many fossil fuels. They won’t vote for that. The IMF has done good things by trying to catalogue more of the real broad costs of these subsidies. They are way ahead of anything that is ever paid to renewables – that’s the madness.

Bex Rae-Evans: there are other players who are directly working against this. I was recently working with the restart project, and the Right to Repair. They are lobbying for people to be able to repair their tech devices, and on the flip side there are other lobbying groups from other organisations who are arguing against the right the repair. What would that argument even look like? They are using things like health and safety, but those groups are lobbying groups on behalf of the tech industry, and that is the line they are using to win their argument.

Tom Passmore: this power imbalance is very interesting. Once you start talking about power and money and influence, then you…


Ken Webster: you have to include all the costs in it. The IMF calculates that the real costs and values in subsidies for the fossil fuel industry in 2017 were around 6.5% of global GDP. Which is absolutely huge. Something like 5 trillion dollars. This includes some of the costs for health, for loss of life, for direct subsidies, indirect subsidies, cleaning up the mess afterwards, and some elements of the climate emergency. The real costs of fossil fuel energy would be huge if the full costs were integrated. But how can we make a rational decision about using oil and coal, if we don’t feel the real costs of it. If your flight from Bristol to Stockholm was now twice as much because the airline had to pay the real costs of fossil fuel, you would make a lot of different decisions about how to get there. You might do a Greta Thunburg, you might want to spend the day on the train. You would make different decision. I am part of a car sharing club here in Devon. That is great, because you can get access to a vehicle, it doesn’t have to be your own, but I hadn’t given up my car yet. If I had started realising that it was really really expensive to use my own vehicle, my move towards using this other form of transport would just be accelerates. It accesllerates the rate at which change happens. At the moment, you are saying markets matter, but you are not wanting to include the full cost in the market.

Tom Passmore: I think that it is mad that fossil fuels get more incentives that renewables. Recycling needs more labour, and labour is taxed, whereas with capital, you get tax incentives.

Andy Doran: we are relatively capital intensive. In Warrington we have the world’s largest rolling mill. I don’t know now many billion dollar asset it would be. It is a Joint asset with another aluminium company. It is a huge site. There are 10s of millions of pounds invested in the worlds’ largest recycling centre in Germany in 2014, at a cost of $250m. Maybe in comparison to some of the mining business, big bucks. It is not like a plastics recycler that could probably set up with a few 10s of thousands. There are barriers to entry related to the size of the industry. Coming to what incentives, there is not a huge number of employees here, but I guess in the value chain there is. I guess one of our asks is around energy. Everyone comes back to use of energy, and the cost of energy. It’s pretty well known that if you recyclel aluminium you are asving 95% of the energy, which is where the huge CO2 savings come from, but if you look at consuming energy in European market place, we are paying quite high prices for energy, we are Co2 taxed as well in the EU emissions trading scheme, and does that put the company in the European context at a disadvantaged position with companies in non-taxed areas? If you look at costs of production of primary aluminium, a lot of it is below cost price, so it is politically managed by China. That’s been the case for a number of years. Primary production just generally we are not factoring all the environmental consequences. If we produce something in China, as a society it is then recycled in Europe, because it is a TV or some electronics good, and it’s recycled here, we are paying European prices to recycle it, and we are taxed on top of it for carbon emissions etc. It seems to be a disincentive to do the right thing. Why don’t we just keep taking the cheap material from Asia. Having affordable energy pricing, constant energy pricing, why would you put a good industry like recycling, in an emissions trading scheme at all? We are the good guys. We are trying to do good things. If you are producing other materials that are energy embedded, maybe you need it, for aviation etc. that’s needed as a disincentive to consumption - to tax the carbon that is being consumed. But for an industry that is actually based in the market of materials at their end of life, why have we got the same level of taxation? Albeit we have much less energy consumption than the primary business. Our request is do we actually need that? It’s not necessarily an incentive, but takes away the disincentive.

Tom Passmore: like so many different parts of this episode, this blew my mind as well. The idea that in Europe, organisations like Novelis use a lot of energy to go through the recycling process. Because they use that energy, they get taxed.

Bex Rae-Evans: But this energy in the long run will save energy, but that is not being taken into account;

Tom Passmore: Yeah! Whereas the nations, states that are creating aluminium are not taxed because of where they are in the world. It’s political, the government in China artificially reduces the price of raw aluminium. It’s a murky world. That’s when you start realising the power imbalance. You are never going to find yourself in a situation where we get to a Circular Economy. Actually do we need real intervention to achieve the Circular Economy? Because there is so much power imbalance in the system, and people don’t want that to change. How do we face these political, powerful, rich actors that don’t want it to happen?

Bex-Rae Evans: This podcast wouldn't exist without Tom Passmore and Sophie Walker from Dsposal. Music has been graciously provided by George Fell. make all of this possible thanks to the shiny podcast studio they provide. I've been and will continue to be Rebecca Rae-Evans. Thanks also to Paul Jakubowski and Johnny Rae-Evans from the Tech For Good Live team. If you're interested in learning more about the Circular Economy then why not listen to the LWARB Circular Economy podcast.


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